Telecom user base swells to 189.92 mn in Q3

Boom time for the communications continued non-stop with India adding 20.08 million wireless subscribers in the quarter ended December 2006, taking the gross telecom subscriber base to 189.92 million.

Ironically the growth has also brought in less average revenues for the operators with tariffs touching low levels.

The all India blended ARPU (Average Revenue Per User) per month for GSM services has declined by 6.2 per cent from Rs 337 in the previous quarter to Rs 316 in the December quarter.

The wireless market grew at 15.5 per cent in the quarter ending December 2006 by adding 20.08 million subscribers.

The gross subscriber base of the wire-line and wireless services together reached 189.92 million in the quarter ending December, 2006 from 170.02 million as on September 2006, showing an increase of 11.70 per cent, said the TRAI's quarterly performance indicator.

Internet subscribers base reached 85.47 lakhs in the quarter by registering a growth of 5.9 per cent and broadband subscriber base reached 20.19 lakhs in the quarter by registering a growth of 11.12 per cent.

GSM user base crosses six million mark for March 2007

The country's GSM-based mobile telephone operators added a record 6.1mn new subscribers in March, taking their total user base to 121.4mn, data released by the Cellular Operators' Association of India (COAI) shows.

At the end of February, total GSM customers stood at 115.3mn.

The March increase was the highest-ever monthly rise and was higher than the 4.9mn new user additions in February, the body representing the GSM service providers said in a statement released late on Wednesday.

Bharti Airtel added 1.7mn customers in March, taking its total to 37.14mn. BSNL added 1.98mn new users, taking its user base to 27.43mn. Hutchison Essar added 1.1mn new customers, taking its total to 26.44mn.

Idea Cellular added only 370,551 subscribers in March as against 568,051 mobile phone users added in February, boosting its user base to 14.01mn. MTNL added 167,992 mobile phone users to take its subscriber base at the end of March to 2.75mn.

FDI in telecom raised to 74%

In a move that could bolster investment in the fast growing telecom sector the government today decided to raise Foreign Direct Investment up to 74 per cent, up from prevailing ceiling of 49 per cent.

Along with raising the FDI limit, the Union Cabinet also approved revised conditions for such direct investment, Information and Broadcasting Minister P R Dasmunsi said after a meeting of the Cabinet, chaired by Prime Minister Manmohan Singh.

Bharti group might list Bharti Teletech on the stock market

Indian telecom giant Bharti Group has said that they are considering the possibility of listing their telecom equipment company Bharti Teletech on the stock exchange.

The company however said that they are not going to list any of their other companies involved in retail, agriculture and finance businesses for at least five years.

Bharti group chairman and managing director Sunil Mittal was quoted as saying: "We will not go public for any of the businesses till they mature. The only company, which may be a candidate for an IPO in the near future, is Bharti Teletech."

The company has already announced plans to invest more than USD 22 billion in the next couple of years. They have huge expansion plans for their telecom venture as they face upcoming competition from Vodafone in the Indian market.

Mittal added: "We are virtually a debt-free company and therefore bringing investment is not a problem at all. As far as the public issue is concerned, I feel it’s my job to put risk capital first and once the risk is diminished or in some cases eliminated, we can go to the capital market."

India's overall teledensity rose to 18 % in Jan, 2007

India's overall teledensity rose to 18% in February from 17.45% in January Government said on Wednesday. It was 12.18% at the end of February 2006. The total number of telephones in the country grew by 3.2% to more than 203mn from 196.7mn at the end of January.

India has now become the third largest telecom market in the world, next only to China and the United States. The rapid expansion of the telecom sector maintained its increasing trend with an addition of about 6.3mn phones during February, an average daily addition of more than two lakh lines.

During the month, Andhra Pradesh, Maharashtra and Delhi added more than three lakh subscribers each in the GSM segment. Almost the entire growth registered during the month was in the wireless segment - with GSM contributing 4.88mn and CDMA 1.35mn, respectively. There was a marginal increase of about 67,000 subscribers in the fixed line segment.

In the CDMA segment, the total subscriber base registered a growth of 2.9% with a net addition of 1.25mn subscribers. The Maharashtra circle contributed the maximum to this addition. Maharashtra, Andhra Pradesh and Delhi added more than four lakh subscribers each during the month.

The growth of broadband connections improved further and at the end of January, about 2.12mn broadband connections were provided. The coverage of broadband connectivity by public sector service providers has reached 815 cities. Further, the total number of existing ISP licencees is 383.

Under the Bharat Nirman Programme, of the 66822 villages, some 39741 villages have been provided with Village Public Telephones so far (VPTs). The remaining 27081 villages are to be covered by November this year.

Telecom Companies to expand in Rural Areas

Far from being unwanted, uneconomical and unviable, offering telephone services in rural India have suddenly become an attractive business proposition for private telecom firms.

The aggressive bids received by the Government for its rural mobile project under the Universal Services Obligation fund on Wednesday point to the fact that telecom service providers and infrastructure providers are falling over each other to be the first one to go where no operator has gone before, something that only state-owned BSNL was mandated to do a few years ago.

But now private companies are willing to roll out infrastructure in rural areas at nearly 80 per cent cheaper rates than the subsidy benchmarked by the Government.

For instance, while the Department of Telecom had set a benchmark of Rs 4.02 lakh a year for each tower to be set up in Andhra Pradesh's East Godavari district, it has got bids for as low as Rs 2.4 lakh from the likes of Reliance Infrastructure and GTL Infrastructure.

In Bihar, while DoT had set a subsidy benchmark of Rs 4.2 lakh per tower a year in places like Begusarai and Darbhanga, operators are willing to set up units for as low as Rs 1.7 lakh.

And these rates, submitted by various companies during the first round of bidding on Wednesday, are set to fall even further as the multi-stage bidding process moves into the second round of competitive bidding.

For the services part of the project, cellular operators have quoted zero amount which means they are willing to offer their services without any subsidy support from the Government. Market analysts point out that stiff competition in the cellular market, which has as many as seven operators, and a saturated urban market is forcing companies to look for subscribers in the rural areas. This is good news for the 60 per cent of the country which is yet to be covered by telecom services.

"Operators are now looking to roll out services in the nook and corners of the country. There is a huge untapped market there and operators now have a rural focused rollout plan," said Mr T.V. Ramachandran, Director-General, Cellular Operators Association of India.

While tele-density in urban areas is close to 30 per cent, it is only about 2 per cent in rural areas. Operators including Airtel, Reliance Communications and Idea Cellular have earmarked a significant part of their investments this year for roll out in rural areas. Contrast this to a few years ago when operators were found defaulting on their village telephony commitments and had to pay hefty fines to the Government for not fulfilling their rollout obligations.

Telecom Subscriber Numbers for Feb, 2007

India's GSM service providers added 4.9mn new subscribers last month, taking the total base to 115.3mn at the end of February, up from 110.5mn in January, the Cellular Operators' Association of India (COAI) said on Thursday.

Among the various circles, Category C witnessed the highest rate of growth at 6.8% in February, followed by Category B at 4.9%. Within Category C, the highest growth was witnessed in Himachal Pradesh (10.3%) followed by Assam (9.3%). In Category B, Haryana recorded the highest growth at 6.9%, followed by West Bengal and Andaman & Nicobar at 6.8%.

Category A circles saw a growth of 3.8% in February. Andhra Pradesh recorded the highest growth of 4.3% followed by Maharashtra at 4.1%. The Metro subscribers grew by 3.3% in February over the previous month. Kolkata recorded the highest growth at 4.6%.

Among the companies, Bharti Airtel added 1.71mn new users as against 1.76mn in January. Hutch Essar added 928,821 new subscribers versus 1.11mn in January. Idea Cellular, which is all set to make its stock market debut on Friday, added 568,051 new users compared to 629,499 in the previous month.

Reliance Telecom, the GSM arm of Reliance Communications, added 234,501 new subscribers as against 235,406 in January. MTNL added 80,588 new users compared to 73,701 in the month before.

Reliance, BSNL and GTL Infra as lowest bidder for telco infrastructure

Reliance Infrastructure, BSNL and GTL Infrastructure have emerged as the lowest bidders for setting up passive cellular infrastructure in over two lakh villages with support from the Universal Services Obligation (USO) Fund. At the end of the first round of bidding held on Wednesday by the Department of Telecom (DoT), the three companies had quoted the lowest amounts in 80 per cent of the 81 pre-determined districts.

The winner of the project, which will be decided after a multi-stage bidding process, could get as much as Rs 400 crore annually for a five-year period from the USO fund for setting up 7,871 passive cell cites, including towers. The DoT got response from 21 companies for the project, of which a few like HFCL dropped out at the last minute.

Mobile service

It also received aggressive bidding from cellular operators such as Hutch, Aircel and Idea Cellular for providing the actual mobile service using the passive infrastructure. Bharti and Tata Teleservices have been knocked out of the race.

The operators who qualified submitted bids quoting zero amount for the project in the first round of bids, which were also opened on Wednesday. This means that they have not sought any financial support from the USO fund for providing the services.

The DoT had provided for Rs 1.5 lakh-2.5 lakh annually for five years for each of the pre-determined 7,871 cell cites across 81 districts. The aggressive bids will save the Government nearly Rs 200 crore a year. But the qualification will allow these operators to locate their equipment on the infrastructure that will be set up with support from USO Fund.

Bids were invited in two parts. The first part is for setting up passive infrastructure like towers and civil construction. The second part of the bid, open only to licensed service providers, is for offering the actual mobile services to rural consumers.

Both the parts were supposed to be multi-stage bidding process; but with operators quoting zero amount, there may not be another round for the second category. However, the DoT may have to undertake elimination round because only three operators per district have been envisaged by the bid document. The bidders for the passive infrastructure, however, will have to go through another round of financial bidding.

Good News for International Roaming Cell Phone Owners

After bringing down tariffs for domestic mobile roaming services, the Telecom Regulatory Authority of India is now looking to facilitate a reduction in international roaming tariffs for Indian consumers travelling abroad. TRAI has sent feelers to the European Commission to allow Indian mobile users to take benefit of the proposed low roaming rates while travelling within the European continent.

The European Commission has proposed to bring down roaming charges within Europe by up to 60 per cent, which could allow mobile users to take roaming services at about Rs 40 a minute compared to the existing tariff which ranges between Rs 60 and Rs 90 a minute.

While the current EC proposal is only for European mobile users, TRAI has sought to include India in the scheme. In return, Europeans travelling to India would get cheaper roaming tariffs.

In a related move, TRAI has also initiated a discussion with telecom regulators in SAARC countries to introduce a regime on the lines of the European Union wherein mobile users travelling with the SAARC region would get cheaper roaming rates.

However, these initiatives could take time to fructify, as it involves multiple operators and telecom regulators working in different environments. In addition, most cellular operators are opposed to the idea of reducing roaming tariffs, which could delay the implementation of the proposal even if the various regulators were to agree on a common platform.

The EC, for instance, has been debating the new roaming tariffs for Europe since July 2006 with operators, including Vodafone, France Telecom and Orange putting their combined weight against the proposal. Operators argue that roaming is a premium service and, therefore, consumers need to pay higher tariff.

With domestic voice calls becoming cheaper, operators are banking on international roaming along with data services to keep their revenues intact. On the other hand, the telecom regulators could enforce the regulation on the operators just like TRAI had forced mobile services providers to cut domestic roaming rates early this year.